I’ve been fired. Can I sue for mental distress?

As a general
rule, Canadian employees don’t get mental distress damages after a wrongful
dismissal. Instead, most successful wrongful dismissal claimants get reasonable
notice damages (a.k.a. pay in lieu of notice) and a portion of their legal
expenses.

In cases where pay
in lieu of notice doesn’t go far enough, recent cases remind us that employees
can seek special damages in response to particularly egregious behaviour. This
includes both behaviour in the course of an employee’s dismissal and in the
litigation of a wrongful dismissal lawsuit.

AGGRAVATED
DAMAGES AVAILABLE FOR MENTAL DISTRESS

In rare cases a
dismissed employee may be awarded aggravated damages of their former employer
engaged in unfair or “bad faith” conduct in the course of dismissal that caused
the employee “mental distress”. This can include behaviour that is untruthful,
misleading or unduly insensitive.

Employees won’t
be entitled to damages for mental stress based on the usual stress and hurt
feelings that arise from a dismissal. To obtain these damages, employees
generally need to prove that they experienced mental distress linked to their
employer’s bad conduct by supplying medical evidence, such as a psychiatrist’s
opinion. Most recipients of these awards have been diagnosed with depression or
anxiety after their dismissal or have shown that their pre-existing conditions
were aggravated by the dismissal. But some employees have obtained these
damages based on their own testimony about the impact of their employer’s
behaviour, particularly when the behaviour was unusually poor.

In even rarer
cases, a judge can order an employer to pay “punitive damages” to a fired
employee. Punitive damages can be awarded for behaviour that is harsh, vindictive,
reprehensible and malicious or extreme.

MENTAL
DISTRESS DAMAGES CAN BE COSTLY

Recent cases
remind us that while mental distress damages or punitive damages are uncommon
in employment law, they can be very costly. Since these damages are meant to be
both proportionate to the harm inflicted and to deter future bad conduct, bigger
corporations may see even larger awards than small businesses.

Recent examples
include:

Churchill v Aero Auction Sales Inc: an
employee walked away with 12 months pay in lieu of notice, unpaid wages, as
well as $75,000 in aggravated damages. Her employer falsely alleged that she
quit to avoid paying her a severance package. The employee was during an
acrimonious separation with her ex- spouse, the company’s president, and the
Court believed that these family law issues (and not the employee’s work
product) motivated the employer.

Boucher v Wal-Mart : an employee sued for constructive
dismissal after her Wal-Mart ignored her harassment complaints. Wal-Mart was
ordered to pay her $200,000 in aggravated damages and $100,000 in punitive
damages. Her harasser was ordered to pay her $10,000 in punitive damages. In
addition, she was paid 8 months pay in lieu of notice. The employee suffered poor
physical and mental health arising from stress related to her treatment, for
which she required medical intervention.

Galea
v Wal-Mart: an
employee was awarded 2 years pay in lieu of notice (including compensation for
loss of her various workplace benefits and bonuses), $250,000 in moral damages,
and $500,000 in punitive damages. Wal-Mart had misled the employee about her
career prospects at the company throughout her last 10 months on the job,
rather than simply dismissing her. In addition to these actions during her
employment, the court citied the company’s delay tactics during the lawsuit as
a basis for additional damages.

Doyle v Zochem: the Court of Appeal upheld
an award ordering significant damages against an employer in a sexual
harassment law suit. $60,000 in moral damages and $25,000 in human rights
damages as well as 10 months salary. The employee’s physical and mental health
was affected by her dismissal.

Altman v Steve’s Music Store: in this somewhat earlier case, an employer
was ordered to pay 22 months pay in lieu of notice, $35,000 in damages for
mental distress and $20,000 in punitive damages. The employee had been
dismissed while sick with cancer after 30 years of service. She suffered long-lasting mental distress
after her dismissal.

LESSONS LEARNED

Employees are deserving of respect on the job and during their dismissals. Where employers mistakenly believe they can simply offer a severance package to fix their bad behaviour, they may end up owing significantly more- particularly if they persist in their bad conduct by delaying or aggressively litigating a wrongful dismissal lawsuit where it is not warranted.

DISCLAIMER: This
blog is for educational and informational purposes only and does not constitute
legal advice. Results of cases described on this website may not be typical and
are not guaranteed. The accuracy of Moly Law Blog posts is not guaranteed, and
laws may change from time to time. If you would like legal advice or have
questions about your particular workplace problems, please contact a lawyer.Click Here to contact Hamilton labour, employment and human
rights lawyers Sarah Molyneaux or Roberto Henriquez now. Contacting Molyneaux Law or using this website does
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